What’s the welfare initiative uniting liberals and conservatives?

Some conservatives and liberals are uniting around the idea of a basic income because the current welfare system, they say, is an ineffective bureaucracy that doesn’t respect poor people’s ability to make their own decisions. Photo by Flickr user Wavy1.

Editor’s Note: As we explored on Making Sen$e last week, the Swiss will soon vote on a ballot referendum on a basic income: 34,000 Francs for every citizen, no strings attached. The idea has support in the United States though, too, and not necessarily from the ideological corners you’d expect.

Libertarian economist Charles Murray supports a basic income of $11,000 per adult citizen that would replace all other social welfare programs. But some liberals, like American University emerita professor Barbara Bergmann, oppose the idea because they want to see existing social welfare programs strengthened to target specific human needs.

Other liberals, like Occupy activist and London School of Economics professor David Graeber, who appears in our segment below, support the basic income as a way to simplify welfare bureaucracy.

Véronique de Rugy falls into Murray’s camp, but her criticism of the way the government makes decisions for poor people doesn’t sound that different from Graeber’s. A senior research fellow at the Mercatus Center, de Rugy backs a minimum income that would replace the existing system and empower people who need assistance to decide for themselves how they want to spend the money. In France, de Rugy oversaw academic programs at the Institute for Humane Studies Europe. She appears in our Making Sen$e segment about Switzerland’s guaranteed income debate, and its appeal in the United States, which you can watch below:

988569878698786Swiss consider welfare overhaul with guaranteed incomeIn Switzerland, an idea to guarantee every citizen a yearly income of 30,000 Swiss Francs, regardless of other wealth or employment, has gained enough supporters to trigger a referendum. Economics correspondent Paul Solman reports that the idea is gaining some traction across party lines in the United States, too, but views differ on if and how a guaranteed minimum income would work.2014-04-07 18:00:00disabled2365218024ibfmz0lknmM

Our extended conversation with de Rugy has been edited and condensed for clarity and length.

What’s the argument for a minimum income?

The argument for a minimum income is that it would replace the current system, which is a bureaucratic nightmare for recipients. The best way to understand the appeal is that it is simple because it gives a lump sum of money to everyone.

It is fair, and more importantly, I think it is respectful of poor people. Unlike the current system, it doesn’t dictate to people who get this money and how to spend it. The minimum income assumes that they, better than anyone else in Washington, know what they need.

There’s a lot of very appealing features, and this is why support for it spans the political spectrum, from liberal to conservative, to libertarian icons like Milton Friedman, Charles Murray, Friedrich Hayek, James Buchanan.

But isn’t there the danger that by simply giving poor people money, you subsidize their already bad habits?

There are some people who will do something bad with the money, but building an entire system that assumes that everyone will do something bad with the money I think leads to the system that we have. And it’s a system that ends up not actually serving poor people well. They will do crazy things under the current system, too, by the way. But I actually believe that poor people, even though you are right, there is probably a minority of them who will do things crazy, are adult and they are responsible, and the majority of them will behave responsibly.

Does it feel odd to be on panels with liberals, arguing for the same thing?

It’s interesting. I have serious concerns that I’ve raised about the guaranteed minimum income, and one of them is the fact that I do believe that civil society and charity are really good alternatives. A system of liberal immigration laws and property rights and economic freedom would actually trigger economic growth, and that would serve poor people well, too. But this is not the system we have right now. We have a government that would distribute money, and in that context, the question that we have to ask is what is the best way to serve poor people. And I think that there are a lot of important aspects of these proposals that should appeal to free market [types] and libertarians, if only because, as I said, it is respectful, and it actually restores some of the faith that we have in people that they can actively, actually act responsibly.

My biggest concern with the guaranteed minimum income is that we will not be able to implement it in practice, and what you will end up with is the system as a new, multitrillion dollar layer of spending, on top of everything else we have. That’s my biggest reservation with this idea.

So you wouldn’t be in favor of it if it was an add-on? Charles Murray says we have to completely demolish the old system.

I agree with him. I think we have to get rid of the whole rest of the system. Well, for one thing, one of the concerns that we have with the guaranteed minimum income, right, is that if you, for instance, give $12,000 to every American adult, it’s a spending of $2.8 trillion. We can’t do it for the financial health of this country if we don’t get rid of all the rest. So the way it is designed, the way it is implemented, is key to gathering support of libertarians and free market people.

But what happens to the poor person who blows all the money in the casino? Don’t we then still have to provide free or subsidized medical care, say?

So what happens to the person right now who, in spite of all the help they’re getting, does all the crazy things that you’re talking about? There is a system that takes care of him. The idea is not to get rid of hospitals, or to forbid access to hospitals to people — this is not what we’re talking about. We’re talking about a better way to bring money to poor people.

It’s not a panacea because a lot of people are poor, not just because they don’t have money. Poverty is a mix of a lot of factors. What we’re talking about right now is not to turn everyone into a business creator or an entrepreneur. We’re trying to find an alternative to the terrible system that we have right now – a system that doesn’t help poor people.

There’s always a risk, but the truth of the matter is there is a vibrant, charitable system that exists in this country — a private system that actually takes care of poor people. So if you provide money already, then let civil society take care of the rest.

Suppose it doesn’t.

Well, the current system that is heavily directed by the government does a very poor job at helping people who are truly poor, and people who make extremely bad decisions with their lives. So I think it is time to give a chance to a vast majority of people who would thrive under an alternative to the current system.

Any chance this would ever happen in my lifetime, say? Or yours?

It’s hard to tell. I actually think that the biggest resistance to going to a guaranteed minimum income is all the special interests that benefit through the current system, which includes the bureaucracies that administer these programs.

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